The first few weeks of 2024 indicate already that Libya’s hydrocarbon sector will continue to experience longer term increases in activity, extending a trend that started in early 2023.
Among recent developments, Libya’s National Oil Corporation (NOC) extended Algerian oil company Sonatrach’s EPSA agreement to compensate for years lost to force majeure. The deal, which included the extension, also triggered the company’s resumption of its exploration activities and provided for further cooperation in marginal oil fields and renewable projects, among others.
In the same time period, Libyan company Harouge Oil Operations announced that it had reached a record production rate of 45,000 barrels per day and has aims to increase this in the future by a further 25,000 barrels per day.
The announcement by the company – a joint venture between the NOC and Canadian oil company, Suncor – exemplifies the NOC’s increased efforts to increase Libya’s hydrocarbon output, in line with its five-year strategic plan.
Indeed, both developments indicate continued growth in Libya’s energy sector, with the extension granted to Sonatrach in particular signalling a positive path ahead for international energy companies.
The NOC’s decision to grant the extension to Sonatrach’s EPSA signals that it is prepared to make pragmatic decisions to ensure critical, major agreements are made workable. This bodes well not only for the NOC, and Libya more broadly, as the country works to become a major global energy market, but also for international companies looking to tap into Libya’s significant energy reserves.
That Sonatrach’s EPSA was extended following such a significant force majeure period shows that the NOC takes a positive outlook on Libya’s future stability and the operational environment.
Our team at Eltumi Partners specialise in energy and infrastructure projects. We track developments in these sectors in order to provide commercial legal support to businesses operating in the sector. Follow our LinkedIn page for ongoing updates and insight.